- UK services PMI result bettered forecasts – AUD rose on US economic concerns
- Doubts linger about UK economy’s health – Long-term analysis needed, say economists
- Australian outlook focused on iron ore – Post-G20 demand from China key to AU prosperity
- RBA interest rate decision due imminently – BoE rate decision on September 15th
The Pound rose notably against the Australian Dollar over Monday’s trading session, thanks to a forecast-beating result for services in August.
Elsewhere, the Australian Dollar traded narrowly, owing to support for the currency mainly coming from overseas instability.
Pound Rallied after UK PMI Windfall, Australian Dollar Unsettled by Contracting Services Sector
Pound exchange rates rose considerably on Monday, thanks to the outcome of the UK services PMI for August.
While this had been forecast to rise from 47.4 to 49.4 (thereby remaining in contraction), the reality saw a climb to 52.9, indicating a clear improvement back into the growth range.
The Australian Dollar gave a mixed performance against its peers, owing to concerns about future iron ore demand from China in the wake of the G20 Summit.
The ‘Aussie’ was, however, supported by US news, where concerns about possible economic damage due to a low interest rates lowered demand for the US Dollar and boosted commodity currencies as a consequence.
Pound (GBP) Gains Contained as Economists Sceptical about UK’s ‘Bounce Back’ from ‘Brexit’
While the latest UK PMIs have beaten forecasts and risen into growth territory, a number of economists have chimed in to downplay potential thoughts that the worst of the Referendum uncertainty is over.
Among these has been EY ITEM Club Senior Economic Advisor Martin Beck, who has forecast that;
‘While the gloomier predictions around the EU vote are unlikely to be realised, the economy is not out of the woods yet’.
China’s Demand for Australian Iron Ore after G20 Vital for Australian Dollar Strength
Chinese demand for iron ore, Australia’s top export, is expected to have a deciding influence on how the Australian Dollar fares in the near-term.
In particular, after the 2016 G20 Summit closes and steel manufacturing in Hangzhou resumes, the level of demand for iron ore, a key component in the steelmaking process, will be closely monitored.
Pound Sterling Australian Dollar Exchange Rate Outlook: RBA and BoE Interest Rate Decisions Ahead
The next major Australian announcement will come tomorrow, when the Reserve Bank of Australia (RBA) makes its September interest rate decision. As it stands, a freeze at 1.5% is expected.
From the UK, the next central bank decision will be on September 15th, when the Bank of England (BoE) makes its choice on the UK rate. The latest predictions have been for no change at 0.25%.
Recent GBP AUD Exchange Rates
At the time of writing, the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.7583 and the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.5689.
Comments are closed.